October 25, 2018

HUMAN CAPITALISM:

The biggest population increase in six decades, driven by international migration, is one reason the Bank of Canada has been able to match the Federal Reserve hike-for-hike since June 2017 -- making the two easily the most hawkish central banks in the Group of Seven. In its latest increase Wednesday, the Ottawa-based central bank highlighted how the surge has bolstered consumption and housing activity.

"Labor income is being boosted by the larger population," the Bank of Canada said in a report Wednesday that accompanied its decision to increase borrowing costs for a third time this year, keeping pace with the Fed's three moves.

Under Prime Minister Justin Trudeau, Canada's population has jumped by 1.4 percent over the past year, double the U.S. pace, driven by a surge in non-permanent residents like students and higher immigration levels.

"We've called it the 'human stimulus,'" Brett House, deputy chief economist at the Bank of Nova Scotia, said in a phone interview.